Coal unit's cost jump leads drop
24/8/2005 8:55
Leo Zhang/Shanghai Daily news
Energy companies
sparked a falloff in Shanghai shares yesterday after the Yanzhou Coal Mining Co
posted higher first-half costs, fanning concern that earnings might be
depressed. The shanghai Composite Index, which groups yuan-denominated A
shares and foreign-currency B shares, eased 0.75 percent to 1,149.96. The
a-share Index ebbed 0.74 percent to 1,208.53, while the B-share Index retreated
1.11 percent to 65.01. "Coal miners may find controlling costs a big task to
handle during their expansion," said Lu Chengde, a Guosen Securities Co trader.
"Besides, there's still uncertainty over future coal prices." Yanzhou coal,
the country's fourth-biggest producer of the energy resource, dived 3.16 percent
to 6.44 yuan (79 US cents). The company said its coal production costs jumped
42 percent to 142.84 yuan per ton in the first six months. Total coal sales
dropped 12.2 percent to 16.6 million tons because delays in relocating villages
overlying coal deposits affected production. Analysts at Credit Suisse First
Boston and CLSA posted an "underperform" evaluation for Yanzhou
Coal. Zhenzhou coal Industry & Electric Power Co lost 2.33 percent to
2.93 yuan while Kailuan Clean Coal Corp withdrew 2.2 percent to 6.67
yuan. Jiangsu expressway Co, the biggest Hong Kong-listed toll road operator
in China, slipped 0.57 percent to 6.92 yuan. The company's stock was downgraded
to "neutral" by CSFB yesterday as traffic volume may drop.
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